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Do your loved ones have an Umbrella Insurance policy?

pexels-photo-100671.jpegThanks to Barbara who asked about concerns she had with wording in a renewed insurance policy. I suggest that all families who are helping or caring for someone with mild cognitive impairment or dementia consider the addition of an “Umbrella” policy.

In a Kiplinger article titled Why You Need an Umbrella Policy, they share that “adding extra liability coverage to your auto- and homeowners-insurance policies can protect your finances from expensive lawsuits.”  Umbrella policies are designed “to help protect you from major claims and lawsuits and as a result it helps protect your assets and your future. It does this in two ways: Provides additional liability coverage above the limits of your homeowners, auto, and boat insurance policies.”

One of my super-powers that I used to my advantage during my parents journey into dementia, was a sense of possible future landmines. My parent’s had auto- and homeowners insurance, but I had a major concern that the might do something that would jeopardize their retirement savings because of their cognitive status. Thankfully, I suggested to my dad that he add an Umbrella policy to their insurance and he agreed that it would be a smart protection given how litigious the world had become.

There was a period of about 3 months when my dad was driving without a valid license. Their doctor had submitted the paperwork to have both of their driving licenses revoked. However, they let me read, then ripped up the notice from the Division of Motor Vehicle that notified them of the license revocation and acted like it never existed. For some reason, they thought only my dad had his licenses revoked, even though they both received the letter (just a week apart). My mom would tell me that if the police pulled them over she would tell them “I was driving but got a cramp in my foot, so my husband took over so he could get me home to take my medication.” Yeah, my parents got really crafty in trying to maintain their status quo.

I was pretty sure the auto-insurance wouldn’t cover them since their licenses were revoked, so I prayed that nothing would happen. If it did, I hoped the umbrella insurance would help protect their assets to pay for the years of care they would be needing.

Later, at a happy hour at my parent’s retirement community, my dad fell over onto a woman and sent her to the ER. Thankfully, she knew my dad and she nor her family pursued a lawsuit. However, I could only imagine how quickly all of their assets could disappear in legal fees and an award.

Two things to do to protect your loved one and their assets:

  1. Contact your insurance agent and have an open discussion about your concerns to find the type of policy that could best protect you and your loved ones.
  2. Contact your estate lawyer. A Trust might be a solution to help protect your assets …. but I’m NOT a lawyer …. so please find a local elder care attorney who can help you navigate the coming years.

Dementia is a cruel beast and it steals so much from the individuals it preys upon, and the loved ones caring for them. I hope the suggestion on how to deal with practical issues to protect your loved ones will help you and your family. Experienced. 

3 comments on “Do your loved ones have an Umbrella Insurance policy?

  1. Thank you for addressing this issue – I’m waiting to hear back from Dad’s attorney. Just received my MemoryBanc – thank you for sharing your experiences and expertise!

  2. Thank you! I didn’t even know such insurance existed.

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